Titan Industries Ltd - Stellar performance, YET, Downgrade to HOLD:: Emkay

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Titan Industries Ltd

Stellar performance, YET, Downgrade to HOLD

HOLD

CMP: Rs228                                        Target Price: Rs225

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n     Results surprise positively – Sales growth of 61% yoy to Rs 20.2 bn and PAT growth at 76.4% yoy to Rs 1.4bn - above our APAT estimates of Rs1.1 bn

n     Jewellery division continued to report stellar performance with 72% yoy growth, while watches recorded 23% yoy growth – Expect volumes to moderate in future

n     Earnings upgrades triggered by rise in gold prices and not by upgrade in volume growth - Upgrade our earnings by 10.6% (Rs6.5/Share) for FY12E and 9.0% (Rs8.2/Share) for FY13E

n     Valuations at 28X FY13E earnings do not offer comfort, being 15% higher then 5-year average PER - Downgrade Titan to HOLD with price target of Rs225/Share